HOLLY Hot List Update: A Story of Rotation

October 8, 2018

It’s no secret that even as the S&P 500 was printing new all-time highs last week, many leading stocks had already begun retracements from their highs. In no place has that been clearer than in our HOLLY Hot List where we’ve shed 16 names since early September — the most rapid pace of exits since I started maintaining this list at the beginning of the year.

This is a clear sign that sector rotation is in full swing, or worse, the market has reached a meaningful top.

I’m not in the camp that this bull market is over, but it certainly feels feasible that we may be in for a long overdue choppy period.

Here is a view of all trades that have exited the HOLLY Hot List since inception. You’ll notice a wave hitting recently:

Exited as of October 8, 2018

One that stands out from this list is one that exited today — Teladoc $TDOC. We rode this name for 200 days and at one point had a 107% open “gain” on this name since it entered our list on March 22. To date, that is the best performer to grace this list. Though, $FIVE is still active and has a chance if it can find some support.

Here is a view of the names currently active on the watchlist:

Prices as of close of trading on October 8, 2018

The “Max Alpha (%)” column is the one I pay most attention to. This highlights the scope of the opportunity to capture profits with swing trades in each name. Obviously, the bigger the percentage alpha, the better chance you might have had to ride some swings for a win. You’ll notice many of my recent additions are struggling to outperform. But it’s early…

If you’d like to see any of the announcements I made for entries of any of the above stocks to the HOLLY Hot List, head to twitter.com and in the search box enter: “@chicagosean + $XYZ” entering the appropriate ticker you’d like to view (don’t include the “quotes”) like below:

I use this HOLLY Hot List as my bullpen for potential swing trades in my personal account. I don’t enter positions in every stock, but I keep an eye on each name for possible good risk/reward setups. If you follow me on Twitter or StockTwits, you’ll see me occasionally posting entries and exits in real time — and many of those swing trades came directly from this list.

This is me leveraging @TradeIdeas’ AI technology as a pre-screener for swing trades that may have an edge. It works for me, and I’d recommend you giving it a try as well. Learn more here.

Sector rotation is happening. If nothing else, its helping me cut the weeds from this garden and freshen it up with new and hopefully better opportunities for the next leg higher in the markets.

~ @chicagosean